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Thursday, 20 June 2013
Page: 6568

Mr TONY SMITH (Casey) (10:16): On behalf on the shadow Treasurer, the coalition will not be opposing the Superannuation Laws Amendment (MySuper Capital Gains Tax Relief and Other Measures) Bill in the House. We do have some concerns but we will allow it through the House and we reserve our final position subject to the findings of the Senate economics committee inquiry. Very briefly, schedule 1 amends the Income Tax Assessment Act 1997 to provide income tax relief to superannuation funds where there is a mandatory transfer of default members' account balances to a MySuper product in another superannuation fund. The introduction of MySuper imposes heightened duties on trustees to act in the best interests of their members. For some funds, this could necessitate the transfer of default members' account balances to other funds. Funds not wishing to offer MySuper products are required under the MySuper rules to transfer existing default members' account balances to a superannuation fund offering a MySuper product by 1 July 2017. If such transfers create an income tax liability or if relevant losses remain with the transferring entity, the members whose balances are transferred would be adversely impacted. Without allowing a transferring entity to transfer losses to another fund, members account balances would have to be reduced by the value of those losses.

I am advised these measures were announced by the minister back on 24 April 2012. They have a small, unquantifiable cost to revenue over the forward estimates. Industry has expressed concern that the amendments as drafted are too narrow and have the potential to overlook some fund members and/or funds who will be caught under capital gains tax rules. As I said, the coalition are not going to oppose these amendment in the principle or in this House but are seeking further detail through that Senate economics committee inquiry.

Scheduled 2 amends the Defence Force Retirement and Death Benefits Act 1973 to give effect to changes that are necessary as a result of implementing and sustaining the superannuation contribution concession contained in schedule 3 of the bill we just dealt with. The amendments allow a lump sum to be paid from a superannuation interest in the Defence Force Retirement and Death Benefits Scheme to meet a debt account discharge liability for Australian Defence Force members of the scheme who are very high-income earners. As a result, a members' superannuation benefits, including any revisionary pension to be paid to the surviving spouse of a deceased member, will be reduced.

Under the tax and super laws amendments that we have just dealt with, defined benefits will also have to pay additional taxation for defined benefit schemes where benefits are set independently to the level of an individual's contributions. Special rules are required to determine the value of certain annual subscription contributions so that the $300,000 threshold can be applied. These rules will be set out separately in regulation and likely require complex calculations. Any amounts to be paid will generally be deferred and will be paid with interest when the individual starts to receive their benefit.

These measures, in our view, should have been part of the substantive bill, but clearly the government with its rushed timetable has not been able to do so. As with a number of bills we have dealt with in the period since the budget, due to the budget emergency the coalition has accepted the substantive measures and will not be opposing the schedule. However, this matter has been referred to the Senate Economics Legislation Committee for further consideration, as our shadow spokesman remains concerned about any unintended consequences with a detrimental impact on the veterans community. As I said at the outset, we will not oppose the bill in this place and we will await the Senate Economics Committee's thorough inquiry into the bill.